When I flipped on the news today I saw that CNN was featuring a piece on “Job Killing Companies.” It’s obviously a subject of interest, particularly in an election year, but some of the names being tossed around don’t seem to be a very good fit. Most of the attention is paid to Carrier, they of air conditioning fame, and their decision to pack up and move to Mexico. They’re based in Indiana and the decision wound up stripping a significant number of jobs out of that state’s economy. Presidential candidates took notice, particularly Bernie Sanders and Donald Trump, who have excoriated them on the campaign trail.
CNN finds this rather odd and notes that Carrier is hardly the biggest source of job losses in the nation these days.
For all the attention Carrier has received, it’s hardly the biggest job-killing company in America in 2016. It doesn’t even rank in the top 20, according to the latest tally from staffing firm Challenger, Gray & Christmas.
The U.S. jobs disappearing right now are mostly in energy and retail.
The top job cutter so far in 2016 is National Oilwell Varco (NOV), a big supplier of equipment used in oil and natural gas drilling. The company is headquartered in Houston and has announced 17,850 layoffs. (Some job losses could be abroad. Challenger, Gray doesn’t break out U.S. job cuts from those overseas.)
So CNN points to an energy industry giant as the biggest “job killer” on the list and is quick to note the Walmart comes in at number two. In fact, here’s the list of the top ten, which sees energy companies holding fully half of the spots.
1. National Oilwell Varco: 17,850 jobs cuts. Reason: Low oil prices
2. Walmart: 16,000. Reason: Store closings
3. Schlumberger (SLB): 12,500. Reason: Low oil prices
4. Intel (INTC, Tech30): 12,000. Reason: Restructuring
5. Halliburton (HAL): 10,200. Reason: Low oil prices
6. Dell: 10,000. Reason: Restructuring
7. Chevron (CVX): 7,500. Reason: Low oil prices
8. Buffetts LLC (owns restaurants): 6,000. Reason: Bankruptcy
9. Devon Energy (DVN): 6,000. Reason: Low oil prices
10. DuPont (DD): 6,000. Reason: Merger with Dow Chemical (DOW)
There’s no point in arguing the numbers here. Job cuts are job cuts and there’s no two ways about it. But the underlying story is a bit different than the description of “job killers” which dominates the headlines. Why do you suppose the candidates are going after Carrier and not the names on this list? It’s because Carrier wasn’t downsizing or going bankrupt. They were consciously choosing to outsource those jobs by moving their facility to Mexico.
N.O.V, Schlumberfer, Halliburton, Chevron and all the rest are certainly bleeding jobs, but they aren’t sending them to China. We’re in the midst of a huge drop in oil prices due to a glut in supply. It’s traditionally been the nature of the business and those jobs will come back (in America, by the way) when the market stabilizes. They might come back faster if the federal government in general and the EPA in particular weren’t fighting so hard against them.
Walmart is listed as the number two villain on the list, but they are also not choosing to simply open their stores in South America. They’ve had to close a large number of stores for a variety of reasons. Competition from online shopping is one of the big ones, but anticipated pressure from increasing minimum wage laws is also forcing them to reexamine their business model. They’ll wind up stabilizing out at some smaller number of employees when the realignment is complete.
It’s funny how CNN chooses to list these companies as the “job killers” while making excuses for Carrier, isn’t it? It’s almost as if fossil fuel interests and Walmart were politically unpopular or something. Naw… that couldn’t be it.